Creating a Go To Market Channel Strategy

April 3, 2002 Key Practices, Inc.

Copyright 20021

Key Practices, Inc.

Go to Market Channel StrategiesPractical Solutions for Fast, Sustainable Results

3 April 2002 Key Practices, Inc. Confidential Developed for SVPMA Presentation – Copyright 2002

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Go to Market Channel Strategies - Agenda

• Disclaimer• Focus• Value Proposition• CRM • Pulling Sales and Marketing Together• Channels• Measure• Build • Closing


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Go to Market Channel Strategies - Disclaimer

• There are many methodologies developed, tested and implemented over the years

• This is a review of “Best Practice” ideas to help organizations build process, gain buy in and see results quickly.


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Go to Market Channel Strategies - Focus

What is the most important factor in developing a “Go to Market Channel Strategy”

?The Customer


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Go to Market Channel Strategies – Focus on the Customer - Basics

After you determine what the best, high-growth markets & segments for your products &

services are…

Focus on Identifying YOUR ideal Customer

within those markets or segments


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Go to Market Channel Strategies – Focus on the Customer – Basics

How can you effectively identify and understand your customer?

-Engage thought leaders in that market?-Survey Prospects?-Go to Trade Shows?-Speak to Analysts?-See what your competitors are doing?

-What do you do? - Audience Participation


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Go to Market Channel Strategies – Focus on the Customer – Basics

How can you effectively identify and understand your customer?

KP’s preferred method:

Get Your Feet Wet!Call a company who fits your ideal customer profileAsk if you can come out and see how they run their

business – more than likely, they will oblige!

– Identify and Understand their challenges– Look for areas of process improvement– Take copious notes– Build a Value Proposition Model for use as a sales tool


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Go to Market Channel Strategies – Focus on the Customer – Value Proposition

Refine & Articulate your “Value Proposition”• Understand the Value of Your Product to the Customer• Where are the Process Improvements• Where are the Cost Savings• What Differentiates You from Your Competitors?

– What are they selling and to whom?

• Outline Financial and Non-financial Benefits– There are clear-cut savings and those that can be realized if this is

implemented

• Create a ROI Calculator Based on These Factors– Use Industry Standards where no data is available

» Example: Overnight delivery is only 95% on time

• Boil this down to 7-10 Questions to get to the ROI – Review Example ROI Calculator


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Go to Market Channel Strategies – Focus on the Customer - Your Target Market

What Makes a Market “Right” for Your Company? Key elements your target market should have:

– Strong demand for your products or services • Not Just High Growth for that Segment!

– Business needs which YOU can address– Customers that can be identified as having an urgent need

and a budget– The ability to reach customers quickly & efficiently– An OVERWHELMING competitive landscape that prevents

your entrance into that marketQUESTION: Do Your Prospective Clients in This Target Market Prefer to Buy

Through Partners or Prefer to Deal Directly with the Manufacturer?


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Go to Market Channel Strategies – Focus on Your Customer - Trends

Know Your Customer(s)!• Know what customers are buying... and what they'll be buying 12-

24 months out• What are their business needs, and how they see you & your

competition’s offerings answering those needs– Where could you improve your “image” in order to win their business

• How do your target customers buy today – What kinds of purchasing processes– Which Channels do they use?– How they plan to do business with their vendors in the future– Do they Prefer e-business and e-commerce for their current or future

purchasing activity– Do they like your Pricing, Bundling, Service and Support?


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Go to Market Channel Strategies – Focus on the Customer – What Else? The C’s

• Identify YOUR Competitors – Both Kinds of Competitors

• Head to Head• Perceived

– Understand How They Do Business• What makes them successful

– How do they go to market? – What channels do they use?

• Build integrated systems for Continued Customer Relationship Management (CRM) into your strategy– Avoid the 3 E’s or You’ll Run out of $

• Everything to Everyone – Everywhere!


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Go to Market Channel Strategies – Focus on the Customer – CRM Now!

Tightly align your BRAND promise to your Customer Experience (multi-channel marketing)

You Will Build a Loyal Customer Base

& Your Competition

Your customer will expect to be able to obtain product information, support, service and procurement when and how they want it, and they will choose the channel and manufacturer that most efficiently provides this.


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Go to Market Channel Strategies – Focus on the Customer – CRM - Integrated Solutions

Companies can be innovative in their delivery of multi-channel benefits through integrated solutions, creating significant growth and be profit drivers – Examples of companies who have invested in this strategy

are: Allstate, Gateway, and E*Trade by building and integrating field, phone, and Internet sales and service.

– The key to these successful multi-channel investments is combining the customer’s data into ONE source.

FACTOID: The market for CRM software alone has grown from zero in 1990 to an estimated $5 billion in 2000 and is expected to reach $12 billion by 2004


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Go to Market Channel Strategies – Focus on the Customer – CRM - Integrated Solutions

• How do you measure success?– Without a consolidated customer data source, determining

the economics of customer segments can be virtually impossible.

• Benefits of a consolidated customer data source:– You could use this consolidated information to analyze

customer behavior across multiple facets of the relationship – Correlate their behavior to “needs-based” segments

defined by sales volume – Understand how a customer segment buys

• Price, Innovation, or Convenience


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Go to Market Channel Strategies – Pulling Sales and Marketing Together

Why?You need to

close the loop!

So You Can Justify More Marketing Dollars!


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Go to Market Channel Strategies – Pulling Sales & Marketing Together – Close The Loop

• You Plan• You Build• You Execute• Did They Come?• Did They Buy? • Are They Coming Back?

Is it a Field of Dreams?


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Go to Market Channel Strategies – Pulling Sales & Marketing Together – Close The Loop

• No CRM? No SFA? What?– Use Excel!

• You NEED Sales Force Performance & Productivity Data– By Region, Market, Competition– Time to Close from Initial Contact– Tools Used to Close Sale – ROI Calculator, References,

etc…

• You need this data for all of your channel partners– Direct Field Sales and Partners


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Go to Market Channel Strategies – Pulling Sales and Marketing Together - Channels

What Can Using Multiple Channels Do For Your Company?

Proper implementation allows for– Companies to Achieve Higher Margins– Build Revenue Faster– Increase Customer Loyalty Factors

What Channels Should My Company Consider?– The Internet– Business Partners, VARS, Distributors, ASP’s– Direct Sales Force


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Your Channel Strategy NEEDS to be Dynamic – Flexible – Easy to Modify & Refine

• Develop Channel Recommendations with Sales– Answer “How you can creatively reach existing & new

customers?”– Establish Specific Criteria – to Develop 3-4 Specific Channels to

Develop Initially

• Determine Who to Partner With & How Many – Evaluate who is in this space & who their clients are– Don’t bite off more than you can chew

• Develop Key Promotion/Pricing Strategies and Tactics• Create Realistic Performance Metrics

– Revenue & Profit Projections over the next 12 & 24 months


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Channel Conflict Will Happen!

Or is it “Should Happen?”• Not all channel conflict is bad

– Channel conflict indicates complete market coverage– If there is no conflict - there are holes in your market

coverage– A channel strategy that accepts some level of conflict –

while avoiding detrimental effects will benefit as markets grow


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Collaborate, Share Knowledge and Execute!– Leverage your regional, national and global channel

partners by providing these 3 elements– Benefit from a Stronger Channel Network

• By combining the best competencies of your channel-network you are optimally serving and building loyalty with your customer

• By connecting each channel member with the necessary communications & infrastructure - they understand the real strengths and capabilities of your channel as a whole


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Go to Market Channel Strategies – Measure

How Are Things Going? – Is Your Plan Yielding Results?– Are You Implementing New Technologies?

• e-commerce Initiatives• Integration of CRM

• Are You On Target with Market & Customers?• Is Your Channel Mix Working?• Are Your Business Partners Effective? • How Are You Coping With Channel Strategies?• Are Your Promotions Creating Results? • Are You Using Closed-Loop Sales Methodologies for Reporting

Performance Results (selling productivity, revenue, market share, profits)?


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Go to Market Channel Strategies – Measure

How Are Things Going? – Is Your Plan Yielding Results?– Are You Implementing New Technologies?

• e-commerce Initiatives• Integration of CRM

• Are You On Target with Market & Customers?• Is Your Channel Mix Working?• Are Your Business Partners Effective? • How Are You Coping With Channel Strategies?• Are Your Promotions Creating Results? • Are You Using Closed-Loop Sales Methodologies for Reporting

Performance Results (selling productivity, revenue, market share, profits)?


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Go to Market Channel Strategies – Build the Plan - Review

What Key Factors Do You See As Important in Building the Plan to Go to Market Today?

Audience Participation


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Go to Market Channel Strategies – The End!

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